Convenience Can Be Costly

You’ve just opened your credit card measure and attached to your statement you happen a “convenience check” included. It may already be filled out with a dollar amount such as as $300, $500, or even $1,000. Your head fill ups with ideas of what you could purchase with this “instant” money. A new summertime wardrobe, a nice dinner and tickets to a concert, a weekend getaway.

But before you travel off on a shopping spree, you should be aware that your “convenience check” is nil more than a cash advance on your credit card. Cash advances on credit cards carry many extra fees, often overlooked or misunderstood by consumers.

Here’s A quick expression at the types of fees most card issuers charge for a cash advance:

1) Upfront fee of 2-4% of the amount advanced. On a $1,000 cash advance your fee will range from $20-$40 in improver to the interest charges.

2) Higher interest rate than on purchases. Many credit card companies charge 18% Oregon more than on cash advances. In addition, most companies apply only a small percentage of your monthly minimum payment toward the cash advance.

Some necessitate that you pay down the balance on your purchases first before applying payments to the higher-interest advance. In other words, you’ll be paying fees and interest on your cash advance for a long time, especially if you only pay the minimum payment.

3) Cash advances normally carry no saving grace period. This agency interest charges accrue as soon as you retreat money or cash the convenience check.

By law your credit card company must let on any fees associated with a cash advance. The easiest manner to happen out what fees are charged is to carefully read your credit card statement or to name your credit issuer’s toll-free customer service number and inquire questions.

Credit card companies charge these fees for two chief reasons. One, to cover the costs to procedure this transaction which are often higher than a regular credit card purchase. And secondly because of the percentage of defaults among credit advance users. These costs are then passed along to you the consumer in the fees and interest rates associated with a cash advance.

The adjacent clip you are tempted to cash that convenience check or retreat money from an standard atmosphere using your credit card, be certain you understand the fees and long term personal effects of using a credit card cash advance.